How Are Canadian Cities Turning Abandoned Houses Into Affordable Homes? Key Updates and What Owners Need to Know for 2025

Responses vary by city, but municipal governments are introducing policies such as taxes and streamlined redevelopment approaches to address the challenge posed by these unused residential structures. Common objectives include returning these properties to productive use and supporting affordable housing availability. This article provides an overview of how abandoned and vacant residential properties are defined and managed in Canada as of 2025. It also outlines information relevant to property owners and buyers about compliance, related costs, and municipal processes regarding these properties.

Definitions of Abandoned and Vacant Residential Properties

• Vacant properties are typically defined as residential units unoccupied for substantial periods—often more than 184 days in a calendar year—and not serving as a principal residence.
• Abandoned, derelict, and neglected homes usually refer to dwellings that are not maintained and may have significant safety or code violations (such as fire damage or structural concerns), or have been left unused by their owners.
• These classifications generally exclude commercial, industrial, multi-residential buildings, or undeveloped land.

These definitions inform the specific municipal actions or penalties that may apply.

How Municipalities Are Responding to Empty Homes

Vacant Unit Taxes

Example: Ottawa’s Vacant Unit Tax (VUT)

Several cities, including Ottawa, have introduced a Vacant Unit Tax to encourage occupancy and deter long-term vacancy:

• Who Declares: All residential property owners are required to annually declare the occupancy status of their property, regardless of use.
• Definition of Vacancy: A property is classified as vacant if it has been unoccupied for more than 184 days and is not the principal residence.
• Tax Rates (2025):
  • First year of vacancy: 1% of the property’s assessed value.
  • Each consecutive vacant year increases the rate by 1%, up to a maximum of 5%.
  • If reoccupied for a full year, the rate returns to 1%.

Other Details:

• The Vacant Unit Tax appears on the property tax bill and is subject to standard penalties for late or missed payment.
• Non-declaration leads to the property being deemed vacant, with the tax applied and an additional $250 late declaration fee.
• False or inaccurate declarations may incur fines up to $10,000.
• Declarations are subject to auditing for up to two years.
• Exemptions may exist (such as for major renovations, bereavement, or medical care), with documentation required upon request.

Funding: Net revenues from the VUT are directed toward affordable housing initiatives, supporting new unit construction.
Source: City of Ottawa Vacant Unit Tax

Property Acquisition and Redevelopment

Example: Winnipeg’s Approach

Winnipeg has implemented measures to expedite reclaiming derelict homes, particularly those uninhabitable due to safety or structural issues:

• Accelerated Acquisition: The city has shortened the time needed to take ownership of distressed properties, which previously could take five to six years through tax sale processes.
• Affordable Housing Development: Acquired lots may be offered to non-profit organizations to construct affordable housing at reduced or nominal prices.
• Community Safety: Targeted efforts focus on areas with high vacancy and fire risk, resulting in improvements to local safety conditions.
• Active Monitoring: Approximately 695 vacant properties are monitored by bylaw enforcement as of 2025.

Program Goals: These activities aim to quickly transition unused or hazardous homes into viable, affordable residences, and reduce related safety risks.
Source: Winnipeg Free Press – City Targets Vacant Buildings

Higher Taxes and Enhanced Enforcement on Derelict Properties

Example: Edmonton’s Derelict Tax Subclass

In 2024, Edmonton introduced a “Derelict Tax Subclass” targeting owners of abandoned and unsafe homes:

• Tax Increase: Owners of classified derelict properties (e.g., boarded, unsafe, hazardous, or incomplete homes) in specified neighbourhoods pay three times the standard residential tax rate.
• Recent Outcomes (2024–2025):
  • 54 homes demolished;
  • 48 homes sold;
  • 8 remediated;
  • The number of derelict properties reduced from 202 to 140 in one year.
  • Approximately $575,000 in additional tax revenue generated.
• Enforcement Actions: The city conducts inspections, issues orders or tickets, and may carry out repairs or demolitions at the owner’s cost.
  • In the most recent reporting period: 4,902 inspections, 731 tickets, 987 orders, and 270 voluntary demolitions.
• Related Impact: Reported structure fires in some areas have decreased.
• Expansion Plans: The city may broaden the program to more districts or property types in coming years.

Objective: The tax subclass is designed to motivate remediation, discourage neglect, and address safety issues, while contributing to city costs associated with managing derelict properties.
Source: Edmonton Derelict Tax Subclass

Important Considerations for Property Owners and Buyers

For Owners:

• Declaration Requirements: Many cities require annual status declarations. Failure to comply may result in vacancy assessments and related taxes or fees.
• Regular Maintenance: Owners are encouraged to address any issues affecting property habitability and ensure all documentation is current.
• Potential Penalties: Non-compliance can result in fines, orders to remediate, or increased tax rates.
• Remediation or Sale: Restoring habitability or transferring ownership can stop escalating taxes or orders.

For Buyers:

• Property Status Checks: Confirm the current occupancy and tax status of a property before purchase, as outstanding liabilities may transfer to new owners.
• Physical and Legal Assessments: Evaluate whether a property is subject to any vacancy-related notices, and consider potential remediation or redevelopment costs.

Connecting Vacant Home Policies to Affordable Housing

A key motivation behind these municipal initiatives is to convert underused homes into affordable housing opportunities. This process supports community well-being and can mitigate risks associated with abandoned properties. Revenues generated from related taxes and the collaboration between public agencies and non-profits help support expansions in affordable housing availability.

Ongoing Issues and Information Gaps

• National Data Limitations: As of 2025, there is no comprehensive national registry or uniform standard for vacant or abandoned property management. Most approaches are developed and tracked at the city level, with varying practices and reporting in provinces and rural areas.
• Need for Further Information: Those seeking information about the broader scope or possible federal interventions may need to review specialized research or associated government publications.

Municipal governments in Canada are adopting various strategies—such as new taxes, accelerated acquisition, and more rigorous enforcement—to address abandoned and vacant homes in 2025. These policies support the return of unused properties to effective use, often expanding affordable housing options and enhancing neighbourhood conditions. Property owners are advised to stay informed about local requirements, while prospective buyers should review property status carefully. While city-level responses are evolving, a standardized national framework does not yet exist.

Sources

• Understanding the Vacant Unit Tax – City of Ottawa
• City targets vacant buildings in effort to increase affordable housing – Winnipeg Free Press
• Cleaning Up Our Communities: Canada’s First Derelict Tax Subclass a Success – Ashley Salvador

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